The monetary position of Case Of The Mismanaged Ms Financial Analysis can be examined by taking a look at its ratio analysis.
We can see in appendix 1 how the revenue has actually been decreasing throughout the years after 2005. The fact that the gross profit margin has reduced as well recommends that the cost of sales have actually not gone down at the very same speed. The declining net profitability, revealing a negative pattern from 2006 to 2007 suggests that expenditures have actually increased even more than the company has the ability to handle given its existing resources. With a long term financial obligation adding to the interest expenditure, Case Of The Mismanaged Ms Financial Analysis remains in alarming need of an alternative revenue stream.
We can see a significant declining trend in the current ratio too revealing a fall in liquidity which is another point of issue for Case Of The Mismanaged Ms Financial Analysis especially as it has a long term debt to settle also. With the current possessions not in a position to pay off the current liabilities, we can see how the business would be in a major monetary trouble unless the cash flow enhances with extra sources of financing.
We could check out the monetary condition of Case Of The Mismanaged Ms Financial Analysis even more by looking at the company's overall financial obligation to total properties ratio in appendix 2. We can see how the total possessions of the business have been decreasing from 2005 onwards. The long term financial obligation has actually stayed at $160 million while the brief term debt has increased side by side. Such a scenario has brought Case Of The Mismanaged Ms Financial Analysis to a point where its overall financial obligation to total properties ratio has increased as well. An increasing overall financial obligation to total possessions ratio suggests that the danger has actually increased in terms of the company's possessions not being enough to cover its total liabilities. This might not be revealing the general liquidity position however gives clearness in regards to the overall monetary position of the company.